Profit level maintained with revenue growth continuing
Long term financing secured
Major developments in the first half of 2011
§ Revenue in the first half of 2011 increased by 12.7% to EUR 1,175.3 million (first half of 2010: EUR 1,042.4 million).
§ The net result for the first six months of 2011 was EUR 100.4 million, which is comparable with the result over the first six months of 2010 (EUR 101.0 million).
§ Long term financing secured with new US Private Placement loans of USD 909 million (7, 10 and 12 years maturity) and prolonged committed bilateral bank loans (5 years) of EUR 725 million.
§ Little impact from political unrest in North Africa and the Middle East.
§ In the first half of 2011 Fugro took delivery of two new build vessels: Fugro Galaxy and Fugro Symphony.
§ In the first six months Fugro acquired four companies.
§ The EMGS convertible loan was converted into 27.8 million shares in EMGS (14.81% of the outstanding shares of EMGS).

Outlook
§ Barring unforeseen circumstances, and assuming reasonably stable exchange rates, Fugro expects that the revenue for the whole of 2011 will be approximately EUR 2,500 million (2010: EUR 2,280.4 million) with a net result of around EUR 260 million (2010: EUR 272.2 million). The result for the full year 2010 was positively impacted by the change in fair value of the EMGS convertible loan (EUR 16 million after tax). For the outlook of 2011 no change in fair value for Fugro’s participation in EMGS over the year 2011 has been included. The above mentioned outlook will result in a net profit margin of 10.4% for the whole of 2011 (2010: 11.9%).

§ In some market segments we expect to experience continued price pressure. This is predominantly the case in the marine seismic data acquisition market.

§ Economic and financial uncertainty in the world may lead to deferral of projects and a tendency for clients to award projects at the last minute.

§ The order backlog for the coming six months amounts to EUR 1,084 million (end June 2010: EUR 1,038 million).

Results first half of 2011
The slowdown in the worldwide economic recovery and issues such as political unrest in countries in North Africa and the Middle East as well as aggregating financial problems in a number of European countries like Greece, created uncertainties in various market segments in which Fugro is exposed. These uncertainties led to deferral of projects and a tendency by clients to award projects at the last minute. This reduces our ability to optimise the planning of resources, which results in many cases in more transit time for vessels between projects.

Notwithstanding the foregoing, Fugro’s revenue for the first six months of 2011 increased by 12.7% compared to the first half of last year and amounted to EUR 1,175.3 million (first half of 2010: EUR 1,042.4 million).
Revenue increased organically by 9.3% and 7.2% was added as a result of acquisitions. These were offset by a negative impact of 3.7% due to the foreign currency effect and 0.1% reduction in revenue due to the disposal of some activities.

Tender activity is high. This is reflected in the backlog showing some improvement in the first half of 2011.

The net result for the first six months of 2011 was EUR 100.4 million, which is comparable with the result over the first six months of 2010 (EUR 101.0 million).

Currency effects were significant in the first half of 2011. The foreign currency exchange loss over the first six months was EUR 12.0 million (first half of 2010: EUR 3.4 million positive). The foreign currency differences were mainly caused by the weakening of the US dollar and the British pound against the Euro. The average US dollar rate over the first half of 2011 was EUR 0.70 (first half of 2010: EUR 0.76).
The foreign currency translation difference for overseas operations had a negative effect on the equity per 30 June 2011 of EUR 66.0 million (30 June 2010: EUR 159.5 million positive). The majority of this translation difference also relates to the US dollar and the British pound.

Lower utilisation of geotechnical vessels was partly compensated by income resulting from the remodelling of the sales agreement of land-based positioning signals with Trimble.

The EBITDA for the first half of 2011 increased by 5.4% to EUR 251.9 million (first half of 2010: EUR 239.1 million). The EBIT for the said period was EUR 141.2 million (first half of 2010: EUR 139.0 million).

Working capital as per 30 June is EUR 2.7 million (31 December 2010: EUR 253.2 million). Reasons for the movement are an increase in the use of bank facilities of EUR 162 million (this is among others caused by the purchase of own shares for the option plan amounting to some EUR 68 million) and the short term portion of loans and borrowings increased with EUR 204 million as a result of the bridge loans for the 2011 acquisitions and the short term portion of the USPP (2002). These effects are offset by the higher book value of the seismic data libraries (EUR 47 million). Some improvement in collection of the aged accounts receivable was achieved in the last few months. However, the recent acquisitions have led to an increase in the level of outstanding accounts receivable compared to the start of the year.

The effective tax rate over the first half of 2011 was 12.6% against 24.4% over the first half of 2010. The lower tax rate is mainly caused by a different spread of geographical locations where projects are being executed. The full year tax rate is expected to be around 20% (full year 2010: 21.9%).

The net profit margin over the first six months of 2011 was 8.5% (first half of 2010: 9.7%).

Basic earnings per share over the first half of 2011 amounted to EUR 1.26 (first half of 2010: EUR 1.30).

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